What is ve(3,3)?
The ve(3,3) tokenomics model is a revolutionary approach to decentralized exchange design that combines vote-escrow mechanics with game theory. Originally pioneered by Andre Cronje with Solidly, the model has been refined and improved by protocols like MagicFox to create a sustainable and fair DeFi ecosystem.
How It Works
At its core, ve(3,3) creates a positive-sum game where all participants benefit from cooperating with the protocol:
Vote-Escrow (ve)
Users lock their FOX tokens to receive veFOX, gaining governance power proportional to their lock duration. The longer you lock, the more voting power you receive. This mechanism ensures that those with the most skin in the game have the greatest influence over protocol decisions.
The (3,3) Game Theory
The (3,3) notation comes from game theory, where both players choosing to cooperate (stake/lock) results in the optimal outcome for everyone. When users lock their tokens:
- Revenue Sharing: veFOX holders earn 25% of all swap trading fees
- Anti-dilution Rebases: Weekly rebases compensate for new emissions
- Bribe Income: Voters earn bribes from protocols seeking emissions
- Fee Sharing: 50% of swap fees from voted gauges go to voters
Why MagicFox’s Implementation Stands Out
MagicFox has built upon the proven Solidly/Thena codebase with several key improvements:
- Multi-chain Deployment: Using LayerZero’s OFT standard, MagicFox operates across Arbitrum, BSC, and Polygon
- Dual Token System: FOX for the swap protocol and SHROOM for the optimizer create separate but complementary incentive structures
- Auto-compounding Vaults: The optimizer layer adds passive income on top of the base ve(3,3) mechanics
- B2B Services: Partner projects can leverage MagicFox infrastructure to grow their own ecosystems
The Flywheel Effect
The beauty of ve(3,3) lies in its flywheel effect: more liquidity attracts more trading volume, which generates more fees, which attracts more token lockers, which deepens liquidity further. This self-reinforcing cycle creates sustainable growth without relying on unsustainable token emissions.
Getting Started
Ready to participate in the ve(3,3) economy? Start by acquiring FOX tokens through our swap or farms, then lock them to receive veFOX. You’ll immediately begin earning trading fees and can vote on gauge emissions to maximize your returns.
Visit the MagicFox App to get started today.